Article 22 of the proposed — U.S. Income Tax Treaty

its benefits unavailable to persons engaged in treaty-shopping.

The proposed Convention also contains rules necessary for its administration, including rules for the resolution of disputes under the Convention and for exchange of information (Article 26). The Convention would permit the General Accounting Office and the tax-writing committees of Congress to obtain access to certain tax information exchanged under the Convention for use in their oversight of the administration of U.S. tax laws.

This Convention is subject to ratification. In accordance with the provisions of Article 28, it will enter into force when the Governments notify each other through diplomatic channels that their constitutional requirements for entry into force have been met. They will have effect for payments made or credited on or after the first day of January following entry into force with respect to taxes withheld by the source country; with respect to other taxes, the Convention will take effect for taxable periods beginning on or after the first day of January following the date on which the Convention enters into force.

The proposed Convention (like those with Latvia and Lithuania) provides at Article 28 that the appropriate authorities of the two Contracting States will meet within five years to discuss the application of the proposed Convention to income derived from new technologies.

The proposed Convention will remain in force indefinitely unless terminated by one of the Contracting States, pursuant to Article 29. That Article provides that either State may terminate the Convention by giving prior notice through diplomatic channels at least six months before the end of any calendar year.

The Department of the Treasury and the Department of State cooperated in the negotiation of the Convention. It has the full approval of both Departments.

Respectfully submitted,

MADELEINE ALBRIGHT.

LETTER OF TRANSMITTAL

THE WHITE HOUSE, June 26, 1998.

To the Senate of the United States:

I transmit herewith for Senate advice and consent to ratification the Convention Between the United States of America and the Republic of Estonia for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income, signed at Washington on January 15, 1998. Also transmitted is the report of the Department of State concerning the Convention.

This Convention, which is similar to tax treaties between the United States and OECD nations, provides maximum rates of tax to be applied to various types of income and protection from double taxation of income. The Convention also provides for resolution of disputes and sets forth rules making its benefits unavailable to residents that are engaged in treaty shopping.

I recommend that the Senate give early and favorable consideration to this Convention and that the Senate give its advice and consent to ratification.

WILLIAM J. CLINTON.

CONVENTION BETWEEN THE UNITED STATES OF AMERICA AND THE REPUBLIC OF ESTONIA FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME

The United States of America and the Republic of Estonia, desiring to conclude a Convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, have agreed as follows: